Mere low profitability of recipient firm not relevant to apply section 40A(2)(b)

Sharp Designers and Engineers India Pvt. Ltd. (Formerly Khinvasara Investments Pvt. Ltd.) Vs ACIT (ITAT Pune) AO had not brought any comparables from market to make out that the case that impugned payment was excessive or unreasonable within the meaning of section 40A(2)(b) and based his conclusion merely on low profitability of recipient firm was not relevant consideration for applying section 40A(2)(b). Therefore, addition was deleted. FULL TEXT OF THE ITAT JUDGMENT There are 3 appeals under consideration. ITA No. 2263/PUN/2014 is filed by the assessee against the order of CIT(A)-V, Pune, da...